Nod for Reach Energy oilfield buy


Reach Energy Bhd managing director Shahul Hamid Mohd Ismail.

KUALA LUMPUR: Special-purpose acquisition company (SPAC) Reach Energy Bhd has received the approval of the Securities Commission (SC) for its proposed qualifying acquisition (QA).

Reach has proposed to pay US$154.9mil (RM608.59mil) for a 60% stake in Palaeontol BV, which is the owner of the onshore O&G field called Emir-Oil LLP in Kazakhstan.

The vendor of the stake in Palaeontol is Hong Kong-listed MIE Holdings Corp. MIE plans to own the remaining 40% in Palaeontol.
 
Palaeontol is the holding company of Emir-Oil which owns oil and gas (O&G) producing fields, development fields and exploration prospects in an extensive 850.3 sq km contract block in the Republic of Kazakhstan.

According to  RPS Energy Consultants Limited (RPS), the indicative gross proved plus probable (2P) reserves are 72.1 million stock tank barrels (MMstb) of oil and 102.4 billion standard cubic feet of gas.
 
The proposed QA will provide an opportunity for Reach Energy to accomplish its strategy of investing in and operating a balanced portfolio of O&G fields covering the wider spectrum of upstream O&G production, development and exploration activities.
 
“Having secured the approval of the SC for the proposed QA, Reach Energy will need to complete the proposed QA by calling for an extraordinary general meeting at a date to be determined to seek shareholders’ approval for the proposed QA,” Reach said in a statement Thursday.
 
“The proposed acquisition of Emir-Oil in Kazakhstan is an attractive investment as it contains a balanced portfolio of production, development and exploration fields. These fields will bring immediate recurring revenues to the company and contribute positively to its cash flow, particularly with the expected improving oil prices in the medium to long term.

“We are confident that this acquisition will bring immense value to our shareholders and other stakeholders alike,” managing director Ir. Shahul Hamid Mohd Ismail said in the statement.
 
Hong Leong Investment Bank and Maybank Investment Bank are joint principal advisers whilst BNP Paribas is the International financial adviser for Reach Energy.

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